A journalist took an Uber from downtown Manhattan to the West Side, only to end up paying $51.69, including the driver’s tip, for the 2.95-mile trip
Uber’s increasing prices has left its own CEO Dara Khosrowshahi in shock. A journalist took an Uber from downtown Manhattan to the West Side to interview Dara, only to end up paying $51.69, including the driver’s tip, for the 2.95-mile trip.
Dara Khosrowshahi, Uber CEO, walks to lunch at the Allen & Company Sun Valley Conference on July 13, 2023 in Sun Valley, Idaho (Photo by Kevin Dietsch / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)(Getty Images via AFP)
Dara Khosrowshahi, Uber CEO, walks to lunch at the Allen & Company Sun Valley Conference on July 13, 2023 in Sun Valley, Idaho (Photo by Kevin Dietsch / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)(Getty Images via AFP)
On being shown the fate, Dara exclaimed, “Oh my God. Wow,” Wired editor-at-large Steven Levy revealed recently. Steven sat down with Dara for an interview at Uber’s annual product event Go-Get in May, and asked Dara to guess the cost of his trip.
“Twenty bucks,” Dara speculated. “Five minutes earlier, the price was $20 higher,” Steven told the CEO, telling him how far off he was.
Steven said Dara attributed the fee to “surge pricing,” according to New York Post. “A surge makes no sense,” Steven replied. “It’s 10 a.m. on a sunny weekday, and it’s not like the president’s in town.” “Everything is more expensive,” stated Dara, noting how inflation has led to prices of everything to rise along with the cost of time and labour.
Uber prices in the US have increased at four times the rate of inflation
A Forbes report revealed that Uber prices in the US have increased at four times the rate of inflation from 2018 to 2022. “Uber began raising US ridehail prices at a double-digit percentage clip in 2018 as the company prepared for its 2019 IPO, and has continued hiking prices ever since,” the report said. “According to data provided to the author by Second Measure, Uber’s average US ridehail fare per trip jumped by 30% from the beginning of 2018 to Q3 2019, and then, according to data from YipitData, by another 41% between Q3 2019 and Q3 2022 – for a total of 83% over the entire 45-month period. This is equivalent to an annual price increase of 17.5% per year, considerably exceeding the CPI gain of 4.5% per year over the same period.”
The report added, “While Uber’s price escalation succeeded in boosting its mobility revenue – ridesharing demand is inelastic, at least at historical price levels — it also depressed consumer demand growth. According to tracking data from YipitData, Uber’s number of US ridehail trips in Q3 2022 decreased 29% from pre-pandemic Q3 2019 levels, offset by the price hike of 41% over the same period. In essence, Uber has traded off decreased ridehail demand (as measured by number of trips) in exchange for increased revenue and profitability.”
Dara previously said that prices were increasing due to a shortage of drivers during the pandemic. However, in August 2022, the company reached a record-high 5 million drivers. The company has announced that Uber’s chief financial officer, Nelson Chai, will step down on January 5, 2024. It added that “a search for his replacement is underway.”
